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Counsel may become involved at different stages, including before an LOI is signed, during negotiation of the purchase agreement, while responding to diligence requests, or during closing preparation. The earlier counsel is involved, the more opportunity there is to address legal issues before the principal documents are finalized. The appropriate timing depends on the particular transaction.

An LOI can establish key business and legal terms that shape the definitive agreement. Having an attorney review an LOI before you sign it can help identify provisions that may have downstream consequences, such as exclusivity periods, binding provisions, or terms that become difficult to renegotiate later. Whether review is appropriate depends on the particular LOI and transaction.

In an asset sale, the buyer purchases specified assets and may assume only those liabilities addressed by the transaction documents, subject to the particular structure and terms. In an equity sale, the transaction involves the acquisition of ownership interests in the entity itself, such as membership interests or shares, with different legal and due diligence considerations. The appropriate structure depends on the particular transaction.

Seller due diligence typically involves providing the buyer with access to organizational records, contracts, financial information, employment matters, leases, licenses, litigation, and other transaction-relevant materials. The scope depends on the particular transaction, the buyer’s requests, and the agreed engagement. Shield Legal Group can help organize and respond to diligence requests while identifying legal issues that may need to be addressed.

Representations and warranties are statements made by the seller about the business being sold. They allocate risk between buyer and seller by describing the condition of the business. If a representation proves inaccurate, the buyer may have a claim under the indemnification provisions. The scope and survival period of representations and warranties are typically negotiable and depend on the particular transaction.

Indemnification is a contractual mechanism by which one party agrees to compensate the other for specified losses or claims. In a business sale, indemnification provisions allocate responsibility for issues that arise after closing, such as breaches of representations and warranties. The scope, duration, caps, and baskets of indemnification are typically negotiable and depend on the particular transaction.

Escrows and holdbacks are provisions that may delay or condition receipt of portions of the purchase price. A portion of the sale proceeds may be held in escrow for a period of time to secure the seller’s indemnification obligations. The amount, duration, and release conditions are typically negotiable and depend on the particular transaction.

An earnout is a provision that ties a portion of the purchase price to the business’s performance after closing. It can bridge a gap between the buyer’s and seller’s valuation expectations, but it also creates ongoing dependence on post-closing results. The structure, metrics, and duration of an earnout depend on the particular transaction.

SBA financing can introduce additional requirements, timelines, and documents into the transaction. The lender may require specific provisions in the purchase agreement, closing documents, or related agreements. Shield Legal Group can represent sellers in SBA-financed transactions and coordinate with the lender as appropriate. The scope depends on the particular transaction.

Yes, when appropriate and authorized by the client. Business sales frequently involve multiple professionals, and Shield Legal Group can coordinate the legal aspects of the transaction with the seller’s broker, accountant, lender, and other advisors. Each professional remains responsible for advice within their own field. The firm does not provide accounting, tax, or brokerage services.

Yes. Shield Legal Group can evaluate a transaction that is already in progress, including one where the buyer has been identified and preliminary terms have been discussed. The firm can review the current documents, assess where the transaction stands, and discuss what legal work may be appropriate. The scope depends on the particular transaction.

Yes. Signing an LOI does not necessarily mean it is too late to involve an attorney. Shield Legal Group can review the LOI, assess the current state of the transaction, and assist with subsequent diligence, definitive agreements, negotiations, and closing matters. The scope depends on the particular transaction.